How Donald Trump’s tax bill might have caused dip in MLB ticket sales


Money | Business & Investing / Tuesday, July 17th, 2018


Attendance at Major League Baseball games is down this year. And like everything else that happens these days, it could be Donald Trump’s fault.

Sure, the awful weather this spring and the fact that there are too many boring strikeouts and the dominance of just a few teams this season could also be reasons that fans are attending games between 5 percent and 6 percent less often in 2018 than they did last year.

But the real reason baseball is having a down year going into tonight’s All-Star Game is the fact that Trump’s tax law changes eliminated the deduction companies used to buy pricey tickets.

That, anyway, is the explanation that some accountants have for the falloff in ticket sales —although they also claim companies are making a mistake by not taking customers to games.

“The knee-jerk reaction was that tickets were no longer desirable” as a business expense, said Steven Schlachter, a partner with the accounting firm Margolin, Winer & Evens. The Long Island outfit specializes in the only interesting part of tax law — deductions for entertainment and meals.

In the old days (meaning, before the new tax laws were passed in December), companies were allowed to deduct from their taxes 50 percent of ticket prices to entertainment events like baseball, football, basketball and hockey.

The 50 percent deduction for business meals survived the tax changes. So, the knee-jerkers could easily decide that treating current clients and potential ones to a nice meal is a home run accounting-wise compared with watching the Mets extend another losing streak.

Those tax law changes, Schlachter says, came right at the time when companies were reviewing their spending for the new year. And since baseball is the first sport to begin after the new year, he thinks companies may have balked at renewing their season tickets.

But Schlachter says he has been telling clients to reevaluate their ticket-buying decisions. The big part of the new law, of course, was that the top corporate tax rate went from 35 percent to just 21 percent. “You could be better off under the new tax law” even if you buy tickets and lose that deduction, says Schlachter

Of course, there are some companies — headed by non-sports fans, no doubt — that might figure out that they are best off with both the new 21 percent rate and not buying sporting event tickets. (But I won’t condone such an anti-American attitude, having been treated by companies to a game or two in my lifetime.)

MLB and the other leagues would probably buy into Schlachter’s view, although the league had no comment on his theory. But baseball in particular would also like some help from above — the clouds.

Up until this past weekend, MLB says it has had 39 games postponed. It still has seven to make up, so that decline in ticket sales might be helped a bit when those missing games are played.

April was a particularly bad month. Twenty-eight games were postponed in the season’s first month, which was worse than any year going back to 2001. The next-worst was 2017, when 26 games were postponed.

While the weather has been largely blamed for the drop in attendance, the way the pennant races are shaping up could be another. The Red Sox and the Yankees are dominating in the American League East — although New York had its hands full with the struggling Orioles this week.

The Cleveland Indians are way ahead in the American League Central and the Houston Astros and Seattle Mariners have control over the American League West.

The National League races are tight because most of the teams suck.

Corporations will have had more time before deciding whether to buy tickets to football, basketball and hockey this fall. So we’ll know better then whether pro sports in general are falling out of favor or whether Trump’s tax law is at least partly to blame.



Source link